The U.S. labor market is showing alarming signs of contraction, prompting Moody’s Analytics‘ top economist Mark Zandi to warn that a full-blown recession could be on the horizon.
Labor Market Shrinks For First Time Since 2020
Zandi described the current situation as a “labor recession,” noting that revisions for June revealed a shrinking workforce for the first time since 2020, as reported by Business Insider on Friday
Preliminary benchmark revisions, coming on September 9, could show even steeper declines in job additions.
Fewer Jobs Without Widespread Layoffs Signal Economic Risk
“These downward revisions and outright job losses are coming without a significant increase in layoffs,” Zandi said.
“If businesses start laying [people] off, then I think this will not just be a jobs recession, will be an overall economic downturn.”
Zandi compared the economy to someone “clinging to the edge of a cliff.”
He explained, “Everything is clinging tightly to the lip of the …